State regulations, however, mean the district will be out even more money - $1.1 million - for the next school year.

The payback notice came after a recent audit calling on the district to better follow seven state categories defining intensive-needs special education.

As a result, Juneau dropped its number of intensive-needs students from 158 to a forecast 125 for the 2008 school year starting in August.

Though the reported number has dropped, the children have not disappeared. They've just been moved into another bookkeeping column.

Most of the students in question still require one-on-one work with a specially trained teacher or para-educator.

The district still must provide the services those students require, Cowan said. As a result, the district says it will lose $1.1 million in funding for the most disabled kids in school. The money must come from the district's general fund rather than from the state.

"We dropped the count for next year because of what happened in Mat-Su," said David Means, the district director of administrative services. The Matanuska-Susitna School District was required to pay the state nearly $2 million following a similar audit.

In February Mat-Su filed a lawsuit claiming the state's criteria amounted to discrimination.

If the 33 students dropped from Juneau's listing were to keep their intensive-needs designation, they would require one-on-one care by a qualified special ed teacher for the student's entire day, under state rules.

The guidelines say a child no longer qualifies if he can feed himself at lunch or take recess alone, according to Lou Kustin, director of student services.

"That's untrue," state director of special education Art Arnold said. "The district can apply for a waiver."

The Juneau School District has never filed for a waiver.

"It's a lot of work and it doesn't seem like we could defend a waiver," Kustin said. Waivers for this year were due last fall, long before the audit.

According to Kustin, half the special education teachers in the district are new. They didn't understand that 15 minutes of freedom during recess unqualified the child.

"Mistakes get made," Kustin said.

Juneau's special education coordinator, Theo Lexmond, said the state's criteria is a "black-and-white" approach to children who actually fall into regulatory gray areas. Students might meet only five of the seven points but still need 100 percent one-on-one attention.

"We might not agree, but we have to follow the rules," Kustin said. "Things change and the district responds."

The most recent numbers show that 820 students receive some form of special education; 2.9 percent of those have intensive needs, giving Juneau the highest rate in the state.

Kustin said Juneau runs higher than other districts for several reasons. The Coast Guard stations families with intensive-needs children in Juneau; and families come here to receive fetal alcohol syndrome services and care at the SouthEast Alaska Regional Health Consortium.

The school district has a growing number of pupils with problems such as Aspergersyndrome, a mild form of autism; attention deficit disorders; post-traumatic stress disorder and oppositional defiance syndrome.

"We see more and more and more of this in our system, and we need more money," Kustin said.

A recent study by the state's five biggest school districts puts the actual cost to educate an intensive-needs student at $60,000 to $88,000. Arnold said the state allows $26,400 for those same children.

"I would like the Legislature to take advantage of their time in Juneau to visit some of the programs and see the kid in the wheelchair being fed at lunch by a teacher," Kustin said. "They need to understand the scope of disability in the district and put a fair number on it."